The Moderating Role of Board Governance on the Relationship Between Managerial Overconfidence and Corporate Risk: Evidence from Emerging Markets
Wagdi, O., Abo Zeid, W., Aly, S. (2024). The Moderating Role of Board Governance on the Relationship Between Managerial Overconfidence and Corporate Risk: Evidence from Emerging Markets. EKB Journal Management System, 3(1), 124-162. doi: 10.21608/msamsj.2023.247683.1036
Osama Wagdi; Walid abobakr Abo Zeid; Sharihan Mohamed Aly. "The Moderating Role of Board Governance on the Relationship Between Managerial Overconfidence and Corporate Risk: Evidence from Emerging Markets". EKB Journal Management System, 3, 1, 2024, 124-162. doi: 10.21608/msamsj.2023.247683.1036
Wagdi, O., Abo Zeid, W., Aly, S. (2024). 'The Moderating Role of Board Governance on the Relationship Between Managerial Overconfidence and Corporate Risk: Evidence from Emerging Markets', EKB Journal Management System, 3(1), pp. 124-162. doi: 10.21608/msamsj.2023.247683.1036
Wagdi, O., Abo Zeid, W., Aly, S. The Moderating Role of Board Governance on the Relationship Between Managerial Overconfidence and Corporate Risk: Evidence from Emerging Markets. EKB Journal Management System, 2024; 3(1): 124-162. doi: 10.21608/msamsj.2023.247683.1036

The Moderating Role of Board Governance on the Relationship Between Managerial Overconfidence and Corporate Risk: Evidence from Emerging Markets

MSA-Management Sciences Journal
Volume 3, Issue 1, January 2024, Page 124-162  XML PDF (546.11 K)
Document Type: Original Article
DOI: 10.21608/msamsj.2023.247683.1036
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Authors
Osama Wagdiorcid 1; Walid abobakr Abo Zeid email orcid 2; Sharihan Mohamed Aly3
1Faculty of Management, Economics and Business Technology, Egyptian Russian University (ERU), Badr City, Egypt
2School of Business, International Academy for Engineering and Media Science (IAEMS), 6th October, Egypt
3College of Management & Technology, The Arab Academy for Science, Technology & Maritime Transport (AASTMT) Smart village, Egypt
Abstract
The study investigated the effect of managerial overconfidence on corporation risks within the moderator role of board governance in Brazil, Egypt, India, Russia, Saudi Arabia, South Africa, and Turkey as emerging markets. The study sample consisted of 70 non-financial corporations during the period from 2013 to 2022. “Operational leverage," “Financial leverage," and “total leverage” were estimated as measurements of corporate risk. On the other hand, “the number of board members," "separation of the chairman of the board governance and the chief executive officer (CEO)," “the number of non-executive board members”, “the number of independent board members”, and “board meets” as measurements of board governance. Managerial overconfidence was the construct variable based on overinvestment in the corporation's total assets. According to cross-sectional data analysis, there is an increase in the adjusted R-squared of managerial overconfidence with all types of corporations' risk when adding board governance as the moderating variable. The study concluded that board governance as the moderating variable has contributed positively to explaining the corporation's risks within the managerial overconfidence of the CEO in emerging markets.
Keywords
Corporation Risk; Board Governance; Managerial Overconfidence; Operational leverage; Financial Leverage
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